Main differences between a company and a self-employed persons
- Responsibility against the law
The company and its directors and not the owners of the company are liable in the event of wrong doing with any of the authorities. In the event of the self-employed person, this person is fully liable against the law.
A company pays less taxation than a self-employed individual if its taxable profit is between: Euro 30,000 - Euro 60,000.
A self-employed person may have as much filing requirements as a company if its turnover exceeds Euro 70,000.
This is because audited financial statements should accompany the self-employed person’s tax return which is a requirement for all Cyprus companies.
- Different Social Insurance Payments
A company has employees and pays on top of its salaries 11.5% for Employers’ Social Insurance. The self-employed person has the same but the individual himself also pays social insurances quarterly at predetermined tax rates.
The company can easily be owned by various parties via the introduction of share issue of capital, a simple and fast process. On the contrary the self-employed person cannot have new owners. Rather if there is such a need a partnership or a company must be formed to cover this gap.